How to Protect Your Older Loved One’s Identity During Tax Season

Dear Donna,

I know that older adults are often the targets of financial fraud. How can I help protect my mother’s identity, especially during tax season?

Sincerely,

Gina in Saline, Michigan

Protect Your Senior Loved One From Identity Theft This Tax Season

Dear Gina,

Tax season is stressful for everyone, especially older adults and their caregivers. According to the Federal Trade Commission, seniors are especially vulnerable to identity theft.

Because cognitive decline may impair an older adult’s ability to make financial decisions, caregivers should take special care to protect their loved ones.

How to Protect Senior Loved Ones During Tax Season

1. Determine if your loved one needs to file.

Many seniors do not need to file federal tax returns if their gross income is under the IRS filing requirements. Gross income includes all income not exempt from tax, as well as Social Security benefits.

If your mom does need to file, determine how she should file (single or married, for example). If her husband passed away during the tax year and she has not remarried, your mom can file a joint return and receive deductions for the deceased spouse.

2. Enlist the help of a trustworthy expert.

A licensed, educated accountant or financial advisor can assist with navigating tax laws and help you get the most out of your deductions. An appropriate advisor will explain the rules and their recommendations without pressuring you and will keep your information private.

3. Secure personal and financial documents.

It may be a good idea to keep documents that are not often needed, such as wills, in a safe deposit box. If you keep important documents at home, lock them up when other people are visiting, and keep them out of sight in high-traffic areas. Shred unneeded documents, including receipts.

4. Talk about common scams with your senior loved one.

Every year, the IRS publishes a “dirty dozen” list of common tax schemes. These include phone scams, in which criminals call people and impersonate IRS agents to demand payment or pose as fundraisers for fake charities.

Talk about these potential scams with your loved one and discuss how they should respond if they are targeted.

5. Keep track of your loved one’s finances.

Caregivers can protect their loved ones by watching for unusual financial activity. Check bank balances for insufficient funds or unexplained withdrawals. Watch for unpaid bills, unusual attempts to send money, or suspicious signatures on checks.

Also watch for unexpected or suspicious changes to your loved one’s will or power of attorney, especially if your loved one cannot explain it or seems confused about the change.

6. Consider an identity theft protection program.

The AARP Identity Theft Protection program offered through TrustedID is a program specially designed for seniors. From monitoring credit to identifying potential threats, you will likely find it to be helpful.

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